Victorian Auditor-General's Office

2 Financial reporting

At a glance

Background

Independent audit opinions add credibility to financial reports by providing reasonable assurance that the information reported is reliable. The quality of an entity’s reporting can be measured by the timeliness and accuracy of the preparation of the reports. This Part covers the results of the 2011–12 audits of the 19 water entities and one controlled entity. It also compares financial reporting practices in 2011–12 against better practice, legislated time lines and 2010–11 performance.

1 Background

1.1 Introduction

The Victorian water industry consists of 20 entities, comprising 19 water entities and one controlled entity. All entities are wholly owned by the state. The entities are stand‑alone businesses responsible for their own management and performance. Each governing board appoints a managing director responsible for the day-to-day operating activities of the entity. An overview of the accountability arrangements of the water industry is provided in Appendix B.

Audit summary

This report presents the results of our financial audits of 20 entities, comprising 19 water entities and one controlled entity. It provides a detailed analysis of financial and performance reporting, their internal controls, financial results and sustainability.

Clear audit opinions were issued on 19 financial reports for the financial year-ended 30 June 2012. At 2 November 2012 the financial report of Watermove was yet to be finalised.

Clear audit opinions were issued on all 16 performance reports for the year.

Water Entities: Results of the 2011–12 Audits

Body
This report covers the results of our financial audits of 20 entities, comprising 19 water entities and one controlled entity. It addresses the timeliness of their financial and performance reporting, their financial sustainability and aspects of how they manage declarations of interest, asset valuations and outsourcing.

Appendix E. Audit Act 1994 section 16—submissions and comments

In accordance with section 16(3) of the Audit Act 1994 a copy of this report, or relevant extracts from the report, was provided to the Department of Health and named hospitals with a request for submissions or comments.

The submission and comments provided are not subject to audit nor the evidentiary standards required to reach an audit conclusion. Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.

Appendix D. Glossary

Accountability

Responsibility of public sector entities to achieve their objectives, with regard to reliability of financial reporting, effectiveness and efficiency of operations, compliance with applicable laws, and reporting to interested parties.

Acquisition

Establishing control of an asset, undertaking the risks, and receiving the rights to future benefits, as would be conferred with ownership, in exchange for the cost of acquisition.

Appendix C. Financial sustainability indicators and criteria

Indicators of financial sustainability

This Appendix sets out the financial indicators used in this report. The indicators should be considered collectively and are more useful when assessed over time, as part of a trend analysis. The indicators have been applied to the published financial information of the 87 public hospitals for the five year period 2007–08 to 2011–12.

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